Dell Committee Slams Icahn’s Latest Offer, Saying It Falls Short

The special committee of Dell’s board of directors overseeing its go-private process fired back at activist investor Carl Icahn’s latest proposal today in a letter to shareholders, saying it is “not, in its present state, a transaction that the special committee could endorse or execute.”

Earlier today, Icahn proposed that Dell offer to buy back as many as 1.1 billion shares of the company in a self-tender offer, at a price of $14 a share. He also announced that he’d purchased more than 72 million shares from his partner in the proxy fight, Southeastern Management, making Icahn Dell’s second-largest shareholder, behind Michael Dell.

The committee went on to say that there’s not enough financing, nor any remedy for the company and its shareholders if the transaction Icahn proposes fails. The plan also doesn’t address the liquidity issues that the committee raised in response to Icahn’s last proposal, it said.

The committee went on to say that the latest proposal appears to offer shareholders a smaller special dividend of $10 a share, versus the prior proposal of $12. Also, stockholders would end up with shares in a still-publicly-held Dell that would have a lot of debt on its books. “Icahn’s current concept would likely force shareholders to continue to own shares in the highly leveraged company that would result,” the committee’s letter said.

“In the absence of an actionable proposal that would create more value for shareholders, the special committee continues to recommend the pending, fully financed $13.65 per share cash sale transaction” proposed by CEO Michael Dell and private equity firm Silver Lake Partners.

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